Operating Ratio Guidance and Cost Savings
Q: Why aren't bigger OR improvements expected despite cost initiatives?
A: Despite revenue headwinds and an expected $25 million wage increase in Q3 [1], we're confident in achieving a second-half OR of 64% to 65%, driven by productivity gains and operational improvements [1][2]. Headwinds from wage increases and fuel costs total about 140 basis points [2][3].

Intermodal Yields and Volume Outlook
Q: Have intermodal yields bottomed? When will they improve?
A: Intermodal yields are likely at the bottom, with mix and price causing 6 to 7 points of weakness [0]. We expect stability in the second half and are nearing an inflection point, as customers anticipate a real peak season this year [0].

Service Improvements and Regaining Merchandise Share
Q: How will you win back lost merchandise volume?
A: By leveraging our improved service and increased capacity, we're focused on providing customers with reliability and cost savings [11]. Even in a challenging freight environment, our enhanced service is attracting customers back from the highway [11].

Impact of East Coast Port Labor Issues
Q: How are East Coast port actions affecting customer behavior?
A: With the ILA contract expiring on September 30, shippers are hedging by increasing activity on the West Coast [9]. We anticipate higher demand for domestic intermodal from the West Coast, as steamship lines may limit inland movements [9].

STB Hearings and Regulatory Impact
Q: How might STB changes affect your operations?
A: The STB is focused on service, aligning with our strategy [4]. Recent meetings reinforced our business plan and the importance of resiliency in driving the U.S. economy [4].

Productivity Initiatives and Headcount Reductions
Q: Will headcount reduce further with operational progress?
A: While T&E headcount is down 2%, this isn't a headcount reduction exercise [5]. We're rightsizing service and aligning asset efficiencies, focusing on reducing waste without impacting service [5][6]. We're on track to be down 2% by year-end versus last year [5].

Coal Yield Expectations
Q: Are coal yields expected to decline in the back half?
A: Coal rates are expected to continue drifting slightly lower [8]. While slight gains occurred due to global disruptions, those have mostly eroded [8].

Land Sales and Financial Impact
Q: Should we factor land sales into the OR outlook?
A: Large land gains are not part of the OR path forward [8]. We typically guide to $30 million to $40 million a year in real estate gains absorbed within the OR [8].

Opportunities in Mexico and Nearshoring
Q: Do you see new opportunities from Mexico's nearshoring trend?
A: Yes, we're discussing opportunities with Grupo Mexico and CPKC, including connecting Mexico to the Southeast via the Meridian Speedway [13]. With manufacturing shifting to Mexico, we anticipate growth in this area [13][14].

Future Operating Ratio Improvements
Q: Does current productivity set up better future OR improvements?
A: We're executing a multiyear plan to reduce OR to below 60% [14]. Current productivity gains, despite a weak freight environment, position us for accelerating OR improvements in coming years [14].